CBC apologizes to brokers and monolines…sort of

CBC apologizes to brokers and monolines…sort of

CBC business commentator Armine Yalnizyan went on CBC’s Metro Morning Wednesday to distinguish brokers from shadow lenders, a follow-up to a segment in which she lumped both into the same category.

“(Brokers) felt – and I think reasonably – that I didn’t capture the full breadth of what it is that they offer to the market sand that they do offer better deals to some people, particularly if you don’t need to find a great deal,” Yalnizyan told Metro Morning’s Matt Galloway. “If you’ve got great credit-worthiness in the eyes of the banks, they can probably make life better for you.”

Yalnizyan joined the broadcast to discuss what she had learned since Friday’s segment – and from talking to mortgage brokers. That episode drew the ire from brokers across the country.

During that segment, Yalnizyan appeared to lump all non-banking lenders – including brokers and their monoline partners -- into the same category.

“Housing prices have increased … so people need to borrow more; you can’t borrow from the banks so you turn to this non-bank sector and it is an expensive option,” CBC business commentator Armine Yalnizyan said on Friday’s Metro Morning segment entitled Shadow Banking. “Bank mortgages, which average about three per cent for a five year fixed term compared to non-banks which can vary between seven and 15 whopping per cent.”

However, Yalnizyan clarified on Wednesday that brokers – and most of the products they offer – are regulated.

She also discussed the fact that brokers often offer lower rates and penalties than the banks and how monolines operate.

“Monolines are companies that lend money but just in one market; in this case we’re talking about mortgages. They don’t take deposits like a bank, they don’t offer any other service, all they do is lend money from mortgages and the money comes from investors,” Yalnizyan said. “So if you are credit-worthy, in the eyes of the banks, they can offer you a slightly lower rate. They will shave off maybe about 10 basis points.”

Although an apology is nice as well as going back on air to try and to correct some of the misinformed information that was already put out there... I don't understand how a professional news broadcast company, such as the CBC radio, can have one of their professional broadcast radio hosts, go on air and speak freely about a topic that she obviously knows nothing about...it definitely doesn't sound like she did much, if any, research on her article at all...and to be honest...once something like that is aired...the damage is done.

If you listened to her segment, Armine certainly retracted all of her "shadow banking" comments on Monolines and mortgage brokers, in fact I think she gave us a bit of a plug when she suggested mortgage brokers can deliver superior rates and better penalty mortgages than banks. Overall I thought her comments were quite balanced.